Not invested in enough! Always feel market too high to invest

Hi

I’m 49 years old mom/wife. I need help investing our portfolio. I’m the human factor mistake!

We have:
$900k in 401k/ira (I jump in and out of stocks)
$800k cash

I just can’t seem to stick with investment plan. I jump in and out of stocks. And I’m super stressed all the time. For cash, I can’t seem to get over fear of investing… I just sit on sideline.

We have limited debt. Mortgage.
Kids going to college.
We Have investment funds for this in Vanguard.

Own $4.5m in real estate- 3 properties. But they are not huge money makers- just building equity.

Thanks for any advice

My husband is in technology. Makes $250k per year.
We max 401k and college funds. Expensive area. $500k mortgage - house worth $2m.

We spend a lot too per month due to 2 kids in college.

Has $1m in stock options vesting 4 years. He wants to retire then at 56. But I don’t know how to get us there.

Hey Lorraine!

Why do you think you are super stressed about investing? When you say you have limited debt, what do you mean? Is it just the mortgage on your primary home? How much do you owe on what?

Primary $2m value, owe $530k
Rental $820,000, owe $600k- break even every month
Rental $2m value, owe $575,000- break even every month- bought at market dip. Built equity but haven’t raised rents to market.

I

Hey @Lorraine!

I generally don’t immediately suggest people run to a financial advisor when they have their first question about investing. One of the big reasons is that for low income/low net worth people a financial advisor often can’t provide more value than their fees cost. i.e. if you have $10,000 to your name, and the financial advisor charges $3,000 for a year of work, you would be better off doing just about anything else.

That said, let’s have some real talk: Your net worth is almost $5 million. That’s what we call in the business “a lotta cheddar”. That’s also an amount of money such that your fear of the market, jumping in and out of stocks, and having almost $1M sitting on the sidelines is hurting you WAY more than a financial advisor’s fees would cost. You’re kind of the perfect candidate for a financial advisor because they can make more money for you than they charge, they can reduce stress in your life, save you time, and you have a relatively complex situation with multiple mortgages, real estate, etc that merit professional help. I’d highly recommend talking to a pro to help ease your mind and grow your wealth with less stress!

THAT SAID, it can be hard to pick a good one. Broad strokes here are some things I look for:

  • CFP designation: That means “Certified Financial Planner”. To my knowledge it requires a lot more education, experience, etc than the type of advisor you’re trying to avoid (which is an insurance salesman who calls themself a financial advisor)
  • Fee Only: This means that the ONLY way the financial advisor makes money is based on a percentage of assets under management. i.e. you have them handle your $800K (for example) and they take 1% per year or less, with a plan of growing it at 10%/year. Plus they can help with a holistic look at the rest of your financial situation.
  • Fiduciary: This is a legal term that means they’re legally obligated to act in your best interest. Bizarrely, not all financial advisors meet this standard.

Here’s a couple financial advisors I personally know and I find to be honest and altruistic. I don’t have a financial arrangement with either of them.

If neither of them are the right fit, or you want someone local, you can use this site to search for CFP designated financial planners.

ALL THAT SAID: What I would do if I were you? I might consider paying off one of the loans on your rentals. Since you have that cash on the sideline and you’re afraid of the market, you might as well put it to work. With free cash flow on a $2M rental property, that’s likely to bring in another $120K+/year or so?! I mean, you can retire on that alone today. Or keep working and dollar cost average $100K/year into the market. Put it all in a target date index fund. Don’t sell anything until you retire. And when you do, just take out what you need each year. Ignore the market. That’s how you win with money. :slight_smile:

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